A type of processing system for medical insurance claims is discussed in U.S. Pat. No. 4,491,725, issued to Pritchard, on January 1, 1985. This patent is incorporated by reference. The patent discusses a system in which a patient seeking medical treatment presents an identification card at a physician's office. Coded data is electronically read from the card, and transmitted to a central brokerage computer. The brokerage computer ascertains from a data base whether the patient is covered by an insurance policy, and, if so, whether the policy will fully pay for the medical treatment sought by the patient. The brokerage computer informs the physician immediately of the information found. The patent further discusses various types of funds transfer which can occur as payment for the medical treatment.
However, this patent does not appear to address the question of (1) How the information contained in the data base is derived, and (2) How and when the information in the data base is updated. The latter question can significantly affect the cost incurred by an employer in providing a group medical insurance plan for its employees. For example, the data base contains a roster of insured employees which must be updated as employees leave the employing company. However, because of various delays, some rosters are updated only once per month. This monthly updating has the result that an employee leaving the service of a company nevertheless retains the ability, whether intended or not, to obtain treatment under the medical insurance coverage until his name is removed from the roster. If a month is assumed to contain thirty days, then, on average, every employee who leaves the employment of a company retains insurance coverage for fifteen days afterward, at the employer's expense.
In addition, there is another possible source of expense to employers based on departing employees. The Consolidated Omnibus Budget Reconcillation Act of 1985 (COBRA) (P.L. 99-272) requires that, under certain circumstances, an employer must continue an employee's insurance coverage after terminating employment.
Both the occurrence of late roster updating, together with the existence of COBRA, create complications when a former employee seeks medical care, because they create uncertainty as to the insurance coverage of the employee. It is very important that the treating physician know whether the employee has insurance benefits.